FTX founder Sam Bankman-Fried (SBF) took the stand to testify at his Thursday trial. However, in what has been considered a rare move, Judge Kaplan sent the jurors home to hear Bankman-Fried’s testimony and determine if it was admissible. Judge Kaplan reportedly dismissed the jury after the prosecutors concluded their case and the defense presented its first two witnesses.
Bankman-Fried was questioned about the data retention policies and FTX regulatory issues. He was also quizzed about the communications s used by his trading firm, Alameda Research, and crypto exchange, FTX. Bankman-Fried said he believes messaging platforms like Slack and Signal align with FTX’s policies. However, prosecutors claimed he encouraged his employees to use these apps to cover their tracks.
Sam Bankman-Fried explained that he only began using the encrypted messaging app Signal after receiving approval from FTX counsel Daniel Friedberg. However, SBF said he never sought counsel to use Signal’s auto-delete feature.
When asked to explain deleting messages on Signal, SBF claimed that Friedberg had authorized a document retention policy that only involved emails and not other modes of communication.
He explained that there were “meetings [with internal and external lawyers] to decide which channels would fall into which categories”, and that only “informal chatter for conversation” was set to auto-delete.
JUST IN:
Sam Bankman-Fried says he believed it was legal to move customer funds from FTX through Alameda Research.
— Whale (@WhaleChart) October 26, 2023
Additionally, Sam Bankman-Fried said he believes his management of FTX complied with the exchange’s terms of service, which permitted Alameda to borrow money from FTX customers “in many circumstances.”
Prosecutors charged SBF with cheating clients by taking $10 billion out of their accounts without authorization, which resulted in an $8 billion hole in FTX’s balance sheet when the company crashed last November.
Several former FTX utives have testified about Bankman-Fried’s alleged involvement in the illegal activities at FTX. Former Alameda Research CEO Caroline Ellison claimed during her day-long testimony that she had collaborated with Bankman-Fried to steal FTX customers’ funds and use them for Alameda investments. Another FTX utive, Gary Wang, admitted to FTX’s wrongdoing.
SBF entered a not-guilty plea to each of the seven criminal allegations against him. Before testifying on Thursday, Bankman-Fried claimed that the utives who took control of FTX after its bankruptcy misinterpreted his plans for the company. Bankman-Fried has also tried to blame some of his former colleagues for FTX’s collapse.
